State Statutory Provisions on Cumulative Voting in Board Elections of For-Profit Corporations

Whether a corporation is required to adopt cumulative voting, and the
manner in which a corporation is permitted to adopt cumulative voting,
are governed by the laws of the state where the company is legally
incorporated. Each state has its own provisions regarding
cumulative voting in board elections.

Most states' laws on cumulative voting are one of four types. The
most prevalent type only allows cumulative voting if a provision for it
exists in the articles of incorporation. The next most popular
type requires cumulative voting unless the articles of incorporation
expressly prohibit it. A third type, used in a few states, allows
cumulative voting to be adopted or prohibited through the company's
bylaws. The fourth type, in use in three states, mandates that
all companies use cumulative voting for the election of their board of
directors.

The remaining states do not fall squarely into one of the above four
categories. These states have a hybrid approach that applies different
rules depending on the type of corporation electing its board.Below we have provided summaries of each state's statutory provisions on cumulative voting for corporate board elections.

Caveat: Some jurisdictions have different rules that depend on the date
of the company’s incorporation. These provisions are designed to
"grandfather in" corporations that originally incorporated under older
statutes. For all jurisdictions, this guide deals only with the rules
relevant to entities incorporated AFTER the dates targeted by these
grandfather provisions.

State Cumulative Voting Provisions

Alabama Cumulative voting is not the default rule, but the articles of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Ala. Code. § 10-2B-7.28 (2004).

AlaskaCumulative voting is the default rule, but the articles of
incorporation may prohibit it. Any amendment to the articles of
incorporation that would eliminate cumulative voting can be defeated if
the number of shares voting against the proposal is at least equal to
the number of shares necessary to elect one board member under
cumulative voting. See Alaska Stat. § 10.06.420(d) (2004).

ArkansasCumulative voting is not the default rule, but the articles of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Ark. Code. Ann. § 4-27-728 (2003).

CaliforniaCumulative voting is mandatory for all corporations not publicly traded
on a major exchange. Other corporations may eliminate cumulative voting
by amending its articles of incorporation or through its bylaws. When
cumulative voting is permitted, shareholders are subject to notice
requirements prior to cumulating votes. See Cal. Corp. Code §§ 301.5,
708(a)-(b) (2004).

ColoradoCumulative voting is not the default rule, but the articles of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Colo. Rev. Stat. §§ 7-102-102(3), 7-107-209 (2003).

ConnecticutCumulative voting is not the default rule, but the certificate of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Conn. Gen. Stat. § 33-712 (2003).

DelawareCumulative voting is not the default rule, but the certificate of
incorporation may allow it. See Del. Code Ann. tit 6, § 214 (2004).

District of ColumbiaCumulative voting is not the default rule, but the articles of
incorporation may allow it. See D.C. Code Ann. § 29-101.27(d) (2004).

FloridaCumulative voting is not the default rule, but the articles of
incorporation may allow it. See Fla. Stat. § 607.0728 (2004).

GeorgiaCumulative voting is not the default rule, but the articles of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Ga. Code Ann. § 14-2-728 (2002).

HawaiiCumulative voting is mandatory for all corporations not publicly
traded. Publicly traded corporations may eliminate cumulative voting by
amending their articles of incorporation or through their bylaws. When
cumulative voting is permitted, shareholders are subject to notice
requirements prior to cumulating votes. See Haw. Rev. Stat. §
414-149 (2003).

IdahoCumulative voting is not the default rule, but the articles of
incorporation may allow it. See Idaho Code § 30-1-728 (2004). The
Idaho Constitution specifically prohibits the legislature from
outlawing cumulative voting. See Idaho Const. art. XI, § 4.

Illinois Cumulative voting is the default rule, but the articles of
incorporation may prohibit it. See 805 Ill. Comp. Stat. § 5/7.40 (2004).

IndianaCumulative voting is not the default rule, but the articles of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Ind. Code. § 23-1-30-9 (2004).

Iowa Cumulative voting is not the default rule, but the articles of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Iowa Code § 490.728 (2003).

KansasThe current statutory scheme provides that cumulative voting is not the
default rule, but the articles of incorporation may allow it. See Kan.
Stat. Ann. § 17-6504 (2003).

Effective January 1, 2005, Kansas will have a slightly revised business
organization code. Cumulative voting rights will not be substantively
affected. See 2004 Kan. L. ch. 143, § 29.

Interestingly, because of the way it was originally passed, the current
version of Kan Stat. Ann. § 17-6504 (2003) may violate the Kansas
Constitution. See Metro Mobile CTS v. Centel Corp., 694 F. Supp. 806,
807-08 (D. Kan 1988). The new version likely does not violate the
constitutional provision implicated in Metro Mobile.

Kentucky Cumulative voting is not the default rule, but the articles of
incorporation may allow it. See Ky. Rev. Stat. Ann. § 271B.7-280
(2004).

Louisiana Cumulative voting is not the default rule, but the articles of incorporation may allow it. See La. Rev. Stat. § 12:75 (2004).

MaineCumulative voting is not the default rule, but the articles of
incorporation may allow it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Me. Rev. Stat. Tit. 13-C, § 730 (2003).

MarylandCumulative voting is not the default rule, but the articles of
incorporation may allow it. See Md. Corp. and Assoc. Code Ann. §
2-104(b)(7) (2003).

MassachusettsCumulative voting is not the default rule, but the articles of
organization may allow it. See Mass. Gen. Laws ch. 156D, § 7.28 (2004).

Michigan Cumulative voting is not the default rule, but the articles of
incorporation may allow it. See Mich. Comp. Laws § 450.1451 (2004).

MinnesotaCumulative voting is the default rule, but the articles of
incorporation may prohibit it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. Any amendment to the articles of incorporation that would
eliminate cumulative voting can be defeated if the number of shares
voting against the proposal is at least equal to the number of shares
necessary to elect one board member under cumulative voting. See
Minn. Stat. § 302A.215 (2003).

MississippiCumulative voting is not the default rule, but the articles of
incorporation may allow it. Miss. Code Ann. § 79-4-7.28 (2004).

MissouriCumulative voting is not the default rule, but either the articles of
incorporation or the bylaws may provide for it. When cumulative voting
is permitted, shareholders are subject to notice requirements prior to
cumulating votes. See Mo. Rev. Stat. § 355.296 (2004). Mo. Const. art.
XI, § 6, gives shareholders the right to cumulate their votes unless
another election method has been adopted by law. Mo. Rev. Stat. §
355.296 (2004) seems to provide for alternative systems in accord with
this constitutional provision.

Montana Cumulative voting is the default rule, but the articles of
incorporation may prohibit it. Any amendment to the articles of
incorporation that would eliminate cumulative voting can be defeated if
the number of shares voting against the proposal is at least equal to
the number of shares necessary to elect one board member under
cumulative voting. See Mont. Code. Ann. § 35-1-531 (2003).

NevadaCumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Nev. Rev. Stat. § 78.360 (2004).

New Hampshire Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See N.H. Rev. Stat. Ann. § 293-A:7.28 (2003).

New Jersey Cumulative voting is not the default rule, but the certificate of
incorporation may provide for it. See N.J. Stat. § 14A:5-24 (2004).

New Mexico Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. See N.M. Stat. Ann. § 53-11-33
(2004).

New York Cumulative voting is not the default rule, but the certificate of
incorporation may provide for it. See N.Y. Bus. Corp. § 618 (2004).

North Carolina Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See N.C. Gen. Stat. § 55-7-28 (2004).

Ohio Cumulative voting is the default rule. Amendments to the articles of
incorporation, but not the original articles of incorporation, may
eliminate cumulative voting. See Ohio Rev. Code Ann. §§ 1701.04(C),
.55, .69(10) (2004).

Oklahoma Cumulative voting is not the default rule, but the certificate of
incorporation may provide for it. See Okla. Stat. tit.18, § 1059
(2004).

Oregon Cumulative voting is not the default rule, but either the articles of
incorporation or the bylaws may provide for it. When cumulative voting
is permitted, shareholders are subject to notice requirements prior to
cumulating votes. See Or. Rev. Stat. Ann. § 65.247 (2003).

Pennsylvania Cumulative voting is the default rule, but the articles of
incorporation may prohibit it. See Pa. Consol. Stat. Ann. § 1758(c)
(2004).

Rhode Island Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. See R.I. Gen. Laws § 7-1.1-31(d)
(2004).

Effective July 1, 2005, Rhode Island will have a new business code, but
this code does not affect cumulative voting. See Rhode Island Business
Corporation Act, 2004 R.I. Pub. Laws ch. 216, § 7-1.2-708(d) (to be
codified at R.I. Gen. Laws § 7-1.2-708(d)).

South Carolina Cumulative voting is the default rule, but the articles of
incorporation may prohibit it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. Any amendment to the articles of incorporation that would
eliminate cumulative voting can be defeated if the number of shares
voting against the proposal is at least equal to the number of shares
necessary to elect one board member under cumulative voting. See S.C.
Code Ann. § 33-7-280 (2003).

TennesseeCumulative voting is not the default rule, but the charter may provide
for it. When cumulative voting is permitted, shareholders are subject
to notice requirements prior to cumulating votes. See Tenn. Code Ann. §
48-17-209 (2004).

TexasCumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Tex. Bus. Corp. Act. art. 2.29(d) (2004).

Effective January 1, 2006, Texas will have a new business organization
code. This new code will not substantively affect cumulative rights,
see Tex. Bus. Org. Code § 21.360-.362 (2004), with the exception of one
quirk (possibly unintentional on the legislature’s part) in the
grandfather provisions. Under current law, corporations incorporated
after September 1, 2003 are presumed to not have cumulative voting
unless the articles of incorporation so provide. For corporations
incorporated prior to that date, the statutory presumption is reversed.
See Tex. Bus. Corp. Act. art. 2.29(d)(2)-(3) (2004). However, under the
new code, the normal statutory presumption against cumulative voting,
see Tex. Bus. Org. Code § 21.360-.361 (2004) is reversed for
corporations incorporated before January 1, 2006. See Tex. Bus. Org.
Code § 21.362 (2004). So companies that incorporated between September
1, 2003 and January 1, 2006 will have their statutory presumptions
reversed from what it was when they originally incorporated!

Utah Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. See Utah Code Ann. § 16-10a-728
(2004).

Vermont Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Vt. Stat. Ann. tit. 11A, § 7.28 (2003).

Virginia Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Va. Code Ann. § 13.1-669 (2004).

Washington Cumulative voting is the default rule, but the articles of
incorporation may prohibit it. See Wash. Rev. Code § 23B.07.280 (2004).

WisconsinCumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Wis. Stat. § 180.0728 (2003).

Wyoming Cumulative voting is not the default rule, but the articles of
incorporation may provide for it. When cumulative voting is permitted,
shareholders are subject to notice requirements prior to cumulating
votes. See Wyo. Stat. Ann. § 17-16-728 (2003).

In Detroit, there have been three mayors in the past two years and the current one has come under scrutiny. Perhaps a system like instant runoff voting will help bring political stability to motor city.